House Passes Mortgage Debt Forgiveness Tax Relief

Last night the United States House of Representatives, extended the income tax exemption on mortgage debt forgiven in a short sale or a workout for principal residences. The bill containing the income tax exemption on forgiven mortgage debt and other expired tax provisions passed by a vote of 378 to 46.

The United States Senate has not yet voted on the measure so please contact your Senators if you have not yet done so, all the way up until the bill is passed or the scheduled end of the Lame Duck session on Friday, December 12*

CALL FOR ACTION - Mortgage Debet Forgiveness Tax Relief - Senate

More information on the Mortgage Debt Cancellation Relief from NAR...
Mortgage Debt Cancellation Relief

Except from NAR 2015 President Chris Polychron's Letter to Representatives: 

Tax Relief from Mortgage Debt Forgiveness.
Since 2007, the tax law has provided that “phantom income” from the discharge of mortgage debt on a personal residence is excluded from gross income. This benefit has provided vital tax relief for millions of homeowners who suffered financial setbacks in connection with the loss of what for most was their greatest financial asset – their home. Unfortunately, millions of families still find themselves underwater on their mortgages or unable to meet their obligations due the struggling economy. Lenders, investors, servicers and REALTORS® often work together execute a short-sale, which allows a family to move without going to foreclosure. This is a better result for the owner, the lender, and the communities where these homes are located. Failure to provide certainty on this relief leaves many unwilling to complete the short-sale as they fear a tax bill they cannot afford. We believe the tax code should not penalize doing the right thing, and we encourage a longer-term extension of this provision.

*Congress could extend the session beyond its current end date

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